Short Interest Increases In Life Sciences Stocks

In a recently released report covering the Healthcare sector, Jefferies & Co. has stated that median short interest for Life Science Research Supply stocks rose 8% in late-May. The increase was most prominent amongst those constituents which have the greatest exposure to EU markets. Of the 44 companies included in the research universe, 41% have more than 5% of their float sold short, while 18% have short-to-float ratios of more than 10%. The median short-to-float ratio for the group rose 40bps sequentially to 3.2%. The average next-12-month consensus P/E multiple for the group contracted 17% from the beginning of May due to recent volatility in the market. The average life science stock is currently trading at a discount to its historic levels, and hence presents a good opportunity to initiate a position.